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Demand-part2, chahiye hi chahiye(inelastic) - Coggle Diagram
Demand-part2
exceptions to Demand
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irrational behaviour(higher price, better product)
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speculative/stock(shares)-p(i), q(i)-bull
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factors/determinants of PED, shift possible= eleastic, cant shift=inelastic
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Nature of Commodity
neccessities,eseential(book)=(I)
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demand forecasting
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types of forecast
macro(inflation, National income)
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FAD of durable goods
special facilities(for M/C , road )
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postpone(yes then Dd fall, VV)
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elasticity of demand
types
price: how to measure Price elasticity of demand,change in Dd due to change in own price of commodity
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total outlay(P*Q), compare P & TE
Price falls, TE increases, Ep>1(ealstic), Indirect relation bet price & TE
price falls, TE falls, same direction, and VV, Ep<1(inelastic Dd)
price falls, TE constant same as original,Ep= unitary elastic Dd =1, direct relation between price & TE
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% measured
perfectly elastic(price constant, qty changes)=infinity(horizontal)
relatively elstic demand, ep>1(flatter), %change in qty>%change in p)
unitary elastic=1, %change in qty=%change in p), hyperbola, area of each rectangle is same
relkatively inelastic,ep<1(steep), %change in qty<%change in p)
perfectly inelastoc(p change, qty constant)=0/9medicine)- vertical
geometric, linear,(lower segment/upper segment)
BE/AB, Ep>1, relatively elastic DD
CE/AC,Ep=1, Unitary elastic DD
DE/AD,Ep<1,relatively inelastic Dd
0/AE=Ep=0, Perfectly inelastic Dd
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income(% measure), change in qty Dd due to change in income of consumer
inexpensive goods, 0 income elasticity, income rise or fall, no change in Dd
normal goods, +ve income elasticity, income rises qty rises
IED bet o & 1, % change in Qd<%Change in Income, income ineleastic
IED=1, % change in Qd=%Change in Income, unitary
IED>1, % change in Qd>%Change in Income,income eleastic
inferior goods, -ve income elasticity, rise income Dd falls,
cross((% measure)), dregree of responsiveness of Qd due to change in price of other goods, % change in QX/%change in PY
complementary(-ve), car & petrol
substitute(+ve), tea & coffeee
unrelated, zero( no relation bet 2 goods), TV & salt
advertisement((% measure)), % change in Qd/% change in Advertisement
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Ea>1(best, A=10%, revenue=50%)
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